I haven't been in the armory myself, but I did a little research for you.
The key is indeed on Lucas Simms's body, and if you are seen entering, then the town will turn hostile. Also, there is a Mister Gutsy robot inside that can be deactivated. Now, if the robot is attacking you, and it goes outside then the whole town will also become hostile. In case the town does turn hostile, then just leave for three days and they'll forget about it ever happening.
As for whether or not it's worth it, it apparently contains a hunting rifle, an assault rifle, a combat shotgun, a laser pistol, a regular pistol and ammo (presumabley for all the weapons). Frankly, I don't think that's really worth it, as all those weapons could be found with much less effort. Really, it depends on what level you are and how strong you are. I didn't do the GNR quest until level 6 or 7, and I think I had a pretty good arsenal of weapons and it was a piece of cake.